Home buyers who have been approved for a mortgage are to be given more time to find a property to buy due to the seizing up of the market.
However, the Banking and Payments Federation Ireland warned there may be delays in issuing home loans.
People who have been hit with an income shock from the Covid-19 pandemic were told by the banking body their lender can keep their application open for a period, after which it will be reviewed.
A recent report from stockbrokers Davy found residential property transactions were "starting to collapse".
The report said the State's Property Price Register update last week added only another 700 transactions, around 40pc lower than the weekly average number of transactions through January and February.
This was likely to lead to a situation where the Central Statistics Office will be unable to produce property price inflation figures for April, the report said.
"For those who have a mortgage approval but who have unfortunately experienced income loss due to Covid-19, a lender can keep this application open, after which it can be reviewed and the customer can provide an update on his/her employment and income situation," said Banking and Payments Federation chief executive Brian Hayes.
The former Fine Gael MEP said this approach was in the interests of both the customer and the lender to ensure mortgages are not extended to those who cannot afford them now or in the immediate future.
Mr Hayes added that delays to the application process could arise where valuers are not able to conduct a full inspection of a property or legal practitioners cannot access everything they need to complete all the steps in buying.
"At whatever stage applicants may be in the mortgage process, should they have any concerns we would encourage them to read the information available on the BPFI's website in the first instance," Mr Hayes said.
"If they have any further questions beyond that, they should get in contact with their lender, who will advise them on their particular situation."
The new guidelines insist banks remain open for business for new mortgage applications and operate "as effectively as circumstances allow".
The Banking and Payments Federation has produced an information booklet that can be found at www.bpfi.ie.
Meanwhile, the Irish Congress of Trade Unions (ICTU) has welcomed the fact people with a Rebuilding Ireland mortgage from their local authority are being offered payment breaks after their incomes were hit by the Covid-19 economic fall-out.
ICTU welcomed the three-month payment breaks announced by Housing Minister Eoghan Murphy for those with local authority mortgages.
A Rebuilding Ireland mortgage is a government-backed loan for first-time buyers and is available through councils.
Single applicants cannot have an income greater than €50,000 a year and joint applicants cannot earn more than €75,000 a year.